Ringgit ends easier against US dollar as Middle East conflict weighs on sentiment

KUALA LUMPUR: The ringgit weakened against the US dollar on Wednesday as uncertainty surrounding the Middle East conflict impacted market sentiment, according to Dr Mohd Afzanizam Abdul Rashid, chief economist of Bank Muamalat Malaysia Bhd. At 6pm, the local currency dropped to 4.0670/0720 against the greenback, down from Tuesday's close of 4.0605/0640.

Brent crude prices reached the US$100 mark amid ongoing tensions between the US, Israel, and Iran, raising concerns over potential disruptions to Gulf crude oil supplies and subsequent inflationary pressures. This could prompt a more hawkish stance from the US Federal Reserve and Bank of Japan next week. The upcoming US Consumer Price Index (CPI) figure, released on Friday, will be crucial for gauging inflation trends.

Dr Afzanizam noted that consensus forecasts anticipate headline inflation at 3.4% for August (July: 3.4%), while core CPI is expected to be 2.4% (July: 2.5%). The ringgit also slipped against major currencies, falling against the euro, British pound, Japanese yen, Philippine peso, Singapore dollar, Thai baht, and Indonesian rupiah.